Doing Business in Vietnam

2. The fastest-growing middle and affluent class in the region, with young consumers who are among the most optimistic in the world providing the right demographics for growth.

3. Real income increasing, as is receptivity to U.S. products and services.

4. Large population of over 90 million consumers.

5. Political stability in region known for its uncertainty.

Over the past 25 years, since economic reforms were initiated in the late 1980s, Vietnam’s annual economic growth rate of 5.3% has been second only to China in Asia. Vietnam has rebounded from the doldrums of the last decade’s global financial crisis as the country has regained its luster as an investment destination and export market. Last year closed with the economy back in full swing, buoyed by GDP growth of 6.7%. Vietnam started 2016 with high expectations, as experts predicted continued growth of 6.7%, second only to India. However, low oil prices and a drought that has devastated parts of the agriculture sector in the south have economists anticipating the country may fail in meeting this target. Taking a longer perspective, a Pricewaterhouse Coopers study forecasts that Vietnam is expected to have the second strongest average GDP growth between now and 2050, exceeding 5 percent a year on average.

The risks posed by inflation that peaked in 2011 at 18.8 percent have been reigned in as the Government of Vietnam (GVN) tightened macroeconomic policy and balanced growth targets with price stability measures. Inflation rate in 2015 was a low 0.6 percent.

The 2001 U.S.–Vietnam Bilateral Trade Agreement (BTA) transformed the bilateral commercial relationship between our two nations and accelerated Vietnam’s entry into the global economy, with Vietnam joining the WTO in January of 2007. Since the BTA, bilateral trade increased from $2.9 billion in 2002 to over $45 billion in 2015

U.S. exports to Vietnam grew by 23.3 percent to $7.1 billion in 2015. This was by far the largest increase out of the U.S.’s top 50 export markets. During the same period, Vietnam’s exports to the U.S. increased 24.2 percent to $38 billion, resulting in a $30.9 billion bilateral trade deficit with Vietnam.

U.S. export of agricultural products account for nearly half of total exports to Vietnam. Industrial inputs continued to see steady growth as Vietnam continues to import machinery, chemicals, instruments and software to support its growing industrial sector. Over $900 million (roughly 13%) of U.S. exports were represented by aircraft, as Boeing delivered several 787s to Vietnam Airlines in 2015.

According to the State Bank of Vietnam, Foreign exchange reserves stood at about $40 billion, up from $35 billion at the end of 2014.